Interactive Investor

Your vote counts: video games, an investment manager and AI

22nd October 2021 09:06

Graeme Evans from interactive investor

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A trio of exciting companies address shareholders in the days ahead. This is how the votes might go.

Sensyne Health (LSE:SENS) and Brooks Macdonald (LSE:BRK) will next week go beyond what's required of AIM-listed companies by seeking shareholder approval for their annual pay decisions.

AGM rules for companies on AIM differ to the main market, but the desire to achieve the highest standards of corporate governance mean many still choose to hold an advisory vote.

In the case of investment services company Brooks Macdonald, this has meant defending the one-off share awards made to its chief financial officer after proxy voting advisory firm Glass Lewis expressed “severe reservations”.

Frontier Developments

When: 9.15am, Wednesday 27 October

Where: The Trinity Centre, 24 Cambridge Science Park, Milton Road, Cambridge, CB4 0FN

How to participate: the Frontier Developments (LSE:FDEV) AGM is an open meeting, but due to Covid-19 the board “strongly encourages” shareholders not to attend in person and to vote on resolutions by proxy. Questions emailed to the company in advance will be answered after the AGM.

Who is in the chair? David Gammon, the CEO and founder of technology investor Rockspring.

How did the company do in the year to 31 May: the video games developer achieved record results, with revenues of £90.7 million driven by “substantial” contributions from its four existing games franchises, including Elite Dangerous and Planet Coaster, and the first sales from Frontier Foundry, its games label for third-party publishing. Operating profits rose to £19.9 million, with cash balances only slightly lower at £42.4 million despite investment of £14 million during the year.

How much is the boss paid? David Braben set up Frontier in 1984 and still owns 32.8% of the company. His base salary increased in August to £272,500, which is the same as for chief creative officer Jonny Watts and chief financial officer Alex Bevis. A bonus of £252,000 took Braben's total pay for the last year to £498,000, while the total remuneration for Watts and Bevis came in at £2.6 million and £4.9 million respectively after they exercised share options.

What's the view of voting agencies? As Frontier is AIM-listed there's no resolution on the remuneration report. But Glass Lewis has recommended voting against the re-election of David Walsh. The company's former chief operating officer became a non-executive in 2018 in order to focus on a start-up opportunity outside the games industry. Frontier says Walsh's knowledge over 20 years on the board and of the wider industry offers significant value to board discussions and decisions, but Glass Lewis describes him as being “affiliated”.

How did last year's AGM go? All resolutions were passed.

Brooks Macdonald

When: 9am, Thursday 28 October

Where: the company's head office at 21 Lombard Street, London, EC3V 9AH

How to participate: An online audio feed of the AGM is being made available as Covid-19 considerations mean Brooks Macdonald (LSE:BRK) would like to keep physical attendance to a minimum. Shareholders should contact AGM2021@brooksmacdonald.com by 9am on Tuesday 26 October for log-in details. The same address is available for submitting questions, which will be answered via email. Proxy votes are required by 9am on Tuesday 26th.

Who is in the chair? Alan Carruthers, who has senior equity markets experience with Morgan Stanley and Cazenove.

How did the company do in the year to 30 June? The group, which provides investment management services to high-net-worth individuals and pension funds, marked its 30th anniversary by growing underlying profits by 33% to £30.6 million. A final dividend of 40p a share, representing a 25% increase, will be paid to shareholders on 5 November.

How much is the boss paid? Andrew Shepherd joined the company in 2002 and was appointed as CEO from July on a salary of £400,000. He replaced Caroline Connellan, who received pay and bonuses worth £549,000 in the financial year.

What's the view of voting agencies? Glass Lewis praises the AIM-listed company for putting its remuneration report before an advisory vote of shareholders, but says it has “severe reservations” about supporting the pay resolution. It is unhappy with the one-off award of 7,626 long-term incentive plan shares for chief financial officer Ben Thorpe to reflect his increased responsibilities in the wake of Connellan's departure. His salary was also increased by 5.7% from July to £350,000, on top of the 17.8% increase the previous year. In response to Glass Lewis, the company said the salary rise and one-off long-term investment plan (LTIP) award were “very much aligned with the business strategy and in the long-term interests of the group and shareholders”.

How did last year's AGM go? The remuneration report was approved with 92.81% of votes in favour.  

Sensyne Health

When: 2pm, Friday 29 October

Where: Voco Thames Hotel, Henley Road, Sandford-on-Thames, Oxford OX4 4GX

How to participate: the AGM will be an open meeting, but a video conference facility is available for shareholders. Requests for a link should be made to CSCSensynehealth@consilium-comms.com by the close of business on Wednesday 27 October. All proxy voting forms must be received by 2pm on that day.

Who is in the chair? Sir Bruce Keogh, a cardiac surgeon and former National Medical Director for NHS England.

How did the company do in the year to 30 April? The clinical AI firm, which uses analytics and data-driven insights to improve patient care and medical research, started the year hampered by an incomplete senior management team and an overhang on the shares remaining from the collapse of the Woodford fund. However, Sensyne Health (LSE:SENS) ended up delivering strong growth in revenues to £9.1 million as it increased the number of anonymised electronic patient records to 8.9 million, part of a target to have 100 million by the end of 2024. It also successfully completed a £27.5 million fundraising to boost its data analytics capability.

How much is the boss paid? Engineer and science entrepreneur Lord Paul Drayson, who owns 23% of the company, received a salary of £500,000 for the year, with an identical figure paid as an annual bonus after his performance exceeded financial and business targets. A value creation scheme was adopted in 2020 and gives the potential to earn nil-cost options based on absolute total shareholder return generated over the performance period.

What's the view of voting agencies? Glass Lewis has previously raised concerns about the value creation plan's potential for excessive remuneration based on just market capitalisation. These concerns are mitigated by the scheme extending to below-board level employees. Glass Lewis has recommended shareholders support all resolutions, including the advisory poll on the remuneration report.

How did last year's AGM go? The remuneration report received 97.8% support from shareholders.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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